Fill out all the yellow boxes in excel. Use the procedure on the right. Thank you!

Guide lines: \&- To view guidolines, move mouse pointer over cell with red triangle. Red triangle ident if ies a cell comment. Problem: Rocky Mountain Lumber, Inc., is considering purchasing a new wood saw that costs $50,000. The saw will generate revenues of $100,000 per year for five years. The cost of materials and labor needed to generate these revenues will total $60,000 per year, and other cash expenses will be $10,000 per year. The machine is expected to sell for $1,000 at the end of its five-year life and will be depreciated on a straight-line basis over five years to zero. Rocky Mountain's tax rate is 34 percent, and its opportunity cost of capital is 10 percent. Should the company purchase the saw? Explain why or why not. Unknown: Project NPV Assumption(s) All incremental cash flows are at theend of theyear. All values rounded to nearest dollar. Salvage value used in straight linedepreciation is zero. Cost of capital is annual ratewith annual compounding. Problem timeline Calculate project NPV = Net Present Value = present value of future ca Type of depreciation: Straight line Use Excel NPV function to calculate present value of future free cash f Output, Net Present Value Project NPV Analucic. cach flow calrulat inne Procedure: First: Calculate free cash flows: Revenues = Annual revenue, cell reference Costs, material and labor = cell reference Depreciation = use SLN function = SLN(cost, salvage, life) Other cash expenses EBT= Revenues - material and labor costs - depreciation - other expenses Taxes = EBT * Tax rate Net income =EBT Taxes Net operating cash flow = Net income + depreciation Cost of new machine = negative cell reference Terminal value at t=5 Market value = cell reference Book value = Cost - accumulated depreciation (sum of depreciations for years 1 - 5). Taxes = (Market value - Book value) Tax rate Terminal after tax cash flow = Market value - taxes Free cash flow = Operating cash flow + cost of new machine + working capital + terminal after tax cash Second: calculate NPV = NPV function + cash flow at t=0 NPV function = NPV(cost of capital, range of cells with future free cash flows) If a green rectangle appears in upper left corner of any cell(s), select the cell or cells, a yellow icon sho button to select the yellow icon, from the drop down menu choose Ignore Error